7 Most Common Manufacturing Challenges & How to Deal with Them

Manufacturing is by far the largest industry in Singapore, contributing 20% - 25% of the country’s annual GDP. It is an exciting sector to be part of, but like every other industry, it faces its fair share of challenges. Manufacturing organizations must overcome these hurdles to continue being successful.

In this article, we explore the most common manufacturing challenges and solutions you can use to address these issues.

1. Maintaining inventory levels

One of the biggest challenges facing any manufacturing company, large or small, is usually related to inventory management. Manufacturers often face inventory problems such as insufficient storage space flexibility in consumer demand, improperly stored products, and shortages. Such issues are difficult to solve quickly because many manufacturing companies still have outdated inventory management systems.

You might think that these aspects of manufacturing aren’t related. However, if you can’t stay on top of your inventory management, it’s going to affect your sales and manufacturing orders directly. 

To stay on top of efficient inventory levels, manufacturers need to use real-time tracking tools for their operations. Real-time tracking allows manufacturers to monitor and manage the flow of raw materials. It also allows them to track work in progress and finished products. This level of insight means companies can prevent inventory problems by intervening at the first sign of trouble.

2. Keeping up with customer demands

The shopping habits of customers are a constantly changing landscape. Over the past decades, customers have always looked for ways to save money when shopping. Today, most people prefer to make purchases online as e-Commerce offers so many options when it comes to products, prices, and payment methods. 

To keep up with customer demands, manufacturers need to conduct market research and carefully modify their products to suit the trends. They also need to invest in accurate reporting tools to estimate the products that need to be sold. 

In addition, manufacturers also need to consider external events such as currency exchange rates, rising fuel prices, current market trends (e.g., the increasing demand for e-Commerce), etc. That way, they can improve their strategies to meet demands. It is also important to make sure the sales and marketing teams are in sync. 

3. Attracting qualified leads

Traditional marketing efforts like trade shows, trade ads, and cold calls are becoming less effective than in the past. In the age of digital marketing, organizations need to do more than just put up a website and hope their potential customers find it.

Industrial B2B marketers need to make a concerted effort to attract, engage, and delight prospects and be found organically through online searches by providing a wealth of information that demonstrates relevance and expertise. That means they need to leverage inbound marketing and SEO tactics by creating content that provides answers to potential customers' questions and concerns.

The best thing you can do to drive traffic to your website is making and distributing original content. The content can be in the form of relevant blogs, case studies, ebooks, infographics, and any other helpful resources. Once trust is built through online engagement and leads are nurtured through sales funnels, those prospects are more likely to engage on a personal level. It may start with a request for a free consultation, demo, assessment, or another offer from the company.

4. Leveraging new technologies

Technological advances seem to be happening every day, increasing demand and putting more pressure on manufacturers to fulfill larger orders. These include ERP software, the internet of things (IoT), robotics, and artificial intelligence.

It is important not to avoid such technological developments. After all, leveraging technologies can pave the way for manufacturers to stay ahead in a highly competitive market.

Efficiency on the shop floor is vital for manufacturers. By implementing automation, companies can increase production levels. They can also reduce safety risks, improve product quality, and increase customer satisfaction.

5. Dealing with labor shortages

Keep in mind that manufacturing problems do not only come from external factors but also internal factors. The struggle to find and retain a skilled workforce is a major concern. Worse, baby boomers are leaving the workforce in record numbers and taking valuable skills with them. While automation can help fill skills gaps, workers will still be needed to apply problem-solving skills, perform analysis, and manage production lines.

Manufacturers can take several ways to address the skill gap, for example, by partnering with local communities and technical schools. They can also offer internships that lead to full-time employment or develop programs and train candidates in everything from mold making and welding to robotics programming and sheet winding.

When companies are competing in a “talent war,” the key is to be creative and wise in recruiting talent. A more effective way to connect, especially with millennials, is through social media. Remember that today's young generation is not just looking for a career; they seek a positive culture that focuses on the well-being of employees and society.

However, it’s important never to sacrifice objectivity in hiring. Only a limited number of potential employees can actually get the job done efficiently. To ensure that incoming workers can quickly adapt to the process, an excellent training program should be implemented.

6. Competing in a global market

Globalization gives your business more freedom to choose suppliers to source your raw materials and gain access to a larger audience, but with this vast opportunity comes the risk of problems occurring along your supply chain. And that's not including the fact that your competitors have the same opportunities as you do, meaning you're competing for market space on a larger scale.

To compete and stay ahead in a global market, you need to start:

1. selling internationally,

2. producing higher-quality goods,

3. increase your online presence, and

4. finding the right tools to help you manage complex logistics and trade laws in different countries.

Also, remember that you will still need to streamline your manufacturing processes, as a larger supply chain equates to longer manufacturing lead times. A manufacturing ERP system can help tremendously with this, as it automates various functions in your supply chain, thereby reducing lead times significantly.

7. Increasing revenue and sales

The more your business grows, the trickier it becomes to increase your revenue and sales. Simply increasing your production capacity won’t help much; instead, it could do more harm than good to your sales. 

What you need to do first is clearly define your returns, as they can include higher sales, increased revenue, greater profits, reduced overhead or production costs, higher employee retention, or better customer satisfaction. The next thing to do is evaluate your processes. This could be as simple as analyzing your inventory to determine if you need to practice a different forecasting method or assessing your marketing strategies to attract more qualified leads.

Try finding new tactics to get your products manufactured and delivered sooner to your customers. This will eventually help build your reputation and possibly bring in new customers while retaining existing ones. 

Final thoughts

Ultimately, these common challenges facing the manufacturing industry are opportunities to strengthen the sector. Manufacturers should focus more on finding efficient solutions to deal with these challenges, and hopefully, the tips above will help reduce their stress overcoming them. 

Feel free to contact us if you have questions about ScaleOcean ERP or concerns regarding your manufacturing operations.

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